Instructure is the company behind Canvas, a learning management system (LMS) that is used by 425 colleges, universities, and school districts. The platform now reaches 6 million teachers, students, and employees and is growing fast. This financing, led by Bessemer Venture Partners, will support high-demand for the product and bring the company one step closer to an IPO.

Instructure was first founded in 2008 by Brian Whitmer and Devlin Daley while they were graduate students in computer science. Whitmer said they were trying to think of a business idea and remembered Paul Graham’s advice for software startups –look for the most broken piece of software you know and there exists an opportunity. They immediately thought of Blackboard, the dominant LMS on the market.

“Using Blackboard was terrible,” Whitmer said during an interview. “I wanted to build something for today’s Web instead of 10 year old technology. Canvas is about opening up the way classes are taught and putting them in an open environment. We want to work within the system to change it by giving institutions better technical tools so they can make education better.”

After years of talking with schools, educator, administrators and students and building out the technology, Instructure released Canvas in 2011. Canvas is an enterprise-grade, cloud-based solution that teachers and students use to manage the entire learning experience. The software tracks grades, allows students to turn in homework online, participate in discussions remotely, work on group projects, and seek help from instructors. Whitmer described it as a “mission critical piece of software for higher education.” He said every institution has an LMS of some sort, and Instructure provides a more open, flexible, easy-to-use alternative to Blackboard. Canvas’s customer base tripled in 2012.

In November 2012, Instructure rolled out the Canvas Network in response to the popularity of Massive Open Online Courses (MOOCs). Startups like Coursera and Udacity are shaking up traditional education by putting it online and making it accessible to millions of people. Whitmer said while that these companies focus on the delivery of lectures and quizzes, this type of content is the “bread and butter of an LMS” and the two areas of online education will end up merging. Instructure wants to be ahead of the game by offering both, and now offers more than 40 open online courses from institutions including Brown University, Ball State University, and the University of Central Florida.

The company has booked more than $90 million in contracts. This fourth round brings its total capital raised to $50 million. Previous investors EPIC Ventures, OpenView Venture Partners, and Tomorrow Ventures also participated. Whitmer said the ultimate goal is to go public so Instructure can “be around for the long haul.” It is based in Salt Lake City and has 220 employees.

Photo Credit: Instructure’s CEO at the ribbon cutting ceremony for a new office building,